This came amid a slowdown in Chinese outbound investment. The region saw $25.3bn in outbound real estate investment activity during the period.
London continued to be a favourite destination for Asian investors, accounting for 26% of the region’s total outflows. Significant funds from Singapore and Hong Kong were directed there to capitalise on the more favourable yields and longer rental periods that are presented by commercial properties that are otherwise domestically unattainable.
Singaporean investors favoured Europe for portfolio diversification, investing $3.4bn there in H12018, stated Yvonne Siew, CBRE’s executive director of global capital markets, Asia Pacific. They also remained active in the US logistics sectors, building a $2.27bn portfolio in the same period.
He also emphasised that there is interest in the office and logistics sectors in the region and beyond, and for many investors. He said: “This is a long-term growth strategy as they seek to diversify their portfolios and enhance their yields given limited opportunities and compressed yields in the domestic market.”
Tom Moffat, head of Capital Markets, Asia at CBRE stated: “The slowing of Chinese investment has prompted the emergence of more diverse capital sources, which illustrates the depth of liquidity and appetite for offshore deployment.”
Chinese investors decelerated their acquisition of overseas assets and began some disposals, which are expected to continue as they continue to strengthen their balance sheets.